AICPA’s Business Combinations Accounting and Valuation Guide
Defining Issues | December 2024
The guide provides key insights and detailed examples for valuation professionals, financial statement preparers and auditors.
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Key impacts
The valuation and accounting requirements around business combinations can be complex and nuanced. This guide includes the following accounting topics:
- Identifying business combination transactions and whether a set of assets meets the definition of a business
- Identifying the acquirer
- Measuring consideration transferred
- Recognizing and measuring identifiable assets acquired, liabilities assumed and any noncontrolling interests
- Recognizing and measuring goodwill or bargain purchase gain.
The guide also includes several valuation topics and detailed illustrative examples, including:
- Assessment of prospective financial information, discount rate, and transaction operating value of the acquiree
- Conceptual guidance on relevant valuation approaches and methods
- Valuation of the most common intangible assets identified and recognized as part of a business combination.
While the guide is focused on US GAAP, the fair value measurement concepts apply regardless of the accounting framework and provide valuable insight into the fair value measurement of intangible assets in general.
Explore more
Resource
Handbook: Business combinations
Latest edition: Our in-depth guide to accounting for acquisitions of businesses, updated for recent application issues.
Insight
IFRS® Institute: Business Combinations
IFRS webcast providing an overview of business combination guidance under IFRS 3.
Insight
Avoiding pitfalls in business combinations
Exploring challenges arising in acquisition accounting
Meet our team
Jennifer Yruma
Executive Director, Dept. of Professional Practice, KPMG US
Frederik Bort
Managing Director, Dept. of Professional Practice, KPMG US
Jennifer Yruma
Executive Director, Dept. of Professional Practice, KPMG US
Frederik Bort
Managing Director, Dept. of Professional Practice, KPMG US
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